Daily summary: Fed less hawkish than expected

• Mixed moods in Europe
• Conflicting information from NATO and Russia
• Minutes showed Fed may raise rates in March
• US oil stockpiles rose unexpectedly

European indices erased most gains and finished today's session slightly lower after NATO warned that Russia continues to gather troops near Ukraine border. The alliance said that satellite images proved Russia still holds more than 150 thousand troops near the border of Ukraine despite Moscow announcing the withdrawal of forces in the area. On the corporate front, Swedish telecoms giant Ericsson stock plunged 10% after announcing an internal investigation had found serious compliance breaches at its business in Iraq. Elsewhere, Heineken posted solid figures for 2021 fiscal year but warned that costs will continue to rise. 

US indices are trading lower partly due to profit taking after yesterday's gains. Nevertheless, there was a slight improvement in moods after the publication of minutes, which confirm the current tone of the Fed, but at the same time do not give any more hawkish signals. The minutes are much more balanced compared to Powell's recent conference, during which he said the market underestimated the Fed's readiness to act. As a result, odds of a 50 bps rate hike have also come down by about 10 percentage points since early today and are now below 50%. On the data front, US retail sales rose 3.8% mom in January, rebounding from an upwardly revised 2.5% decline in previous month, and beating analyst estimates of 2% rise. Industrial production increased 1.4% from a month earlier in January, after a 0.1% fall in December and well above market projections of a 0.4% increase.

Upbeat moods prevail today in commodity markets amid weaker dollar and elevated treasury yields. US 10-year Treasury rose to 2.05%, while gold again jumped above $1860 level. Meanwhile silver gains 0.80% and is approaching $23.60. WTI price rose slightly following the release of the EIA  report which showed oil inventories increased by 1.121 million barrels last week, while markets expected a draw of 1.572 million barrels. On the other hand crude holdings at the storage hub in Cushing, Oklahoma declined by 1.9 million barrels to 25.8 million barrels, their lowest since September 2018. However gains were quickly erased and WTI oil is trading near the flatline around $92.10. Major cryptocurrencies move slightly lower on Tuesday. Bitcoin fell 1.4% and trades around $43 600 while Ethereum broke below $3100 level.

Gold price bounced off the earlier broken upper limit of the triangle formation and returned above  $1860.00 level which coincides with 23.6% Fibonacci retracement of the last upward wave. If current sentiment prevails, bullish move may accelerate towards $1917.00 level, where June 2021 highs are located. Source: xStation5